U.S.’s Tai Calls for WTO Reforms to Make Trade ‘Race to the Top’
(Bloomberg) -- U.S. trade chief Katherine Tai reaffirmed Washington’s commitment to the World Trade Organization in a speech that marks the first time that the nation’s top trade official has visited the institution in half a decade.
“The Biden-Harris Administration believes that trade -- and the WTO -- can and should be a force for good that encourages a race to the top and addresses global challenges as they arise,” Tai said in remarks prepared for delivery in Geneva and provided by the office of the U.S. Trade Representative. “The organization has rightfully been accused of existing in a “bubble,” insulated from reality and slow to recognize global developments. That must change.”
Tai’s remarks stands in contrast to her predecessor, Robert Lighthizer, who was a staunch critic of the WTO, played an active role in crippling its dispute settlement system and refused to visit the organization that he blamed for failing to curb China’s most egregious trade practices.
However, Tai did not offer a clear vision in her prepared remarks for rebooting the WTO appellate body, which previously had the final say in trade disputes that affected billions of dollars in international commerce.
Instead, Tai echoed Lighthizer’s criticism that the WTO’s dispute-settlement system had become a forum for nations to litigate trade concessions rather then negotiate them.
“Over time, ‘dispute settlement’ has become synonymous with litigation -- litigation that is prolonged, expensive, and contentious,” according to the text of her comments.
In a question-and-answer session after her speech, she said: “The point is not to punish each other; the point at the end of all of this is to create the conditions for the two members to come together to find an accommodation.”
The Biden administration has maintained its predecessor’s hold on appellate-body nominations saying that the U.S. “continues to have systemic concerns” with the functioning of the panel.
The Trump administration paralyzed the WTO appellate body in December 2019 when it blocked all new appointments to the seven-member panel, saying it had overstepped its mandate.
Tai said the U.S. wants to create a “more flexible WTO, change the way we approach problems collectively, improve transparency and inclusiveness, and restore the deliberative function of the organization.”
Tai also urged WTO members to listen to each other more, “include new voices, find new approaches to problems, and move past the old paradigms we have been using for the last 25 years.”
“The test for the credibility of the WTO is going to be how do we approach the reform conversation,” Tai told reporters during a separate press conference in Geneva. “In 25 years the economy has changed and a lot of the members have changed as well.”
“There is a feeling of malaise around here and I think the time is now for us to confront that malaise,” she said. “Everyone agrees that the WTO needs reform. The top priority for reform is getting that process underway.”
The WTO’s 12th ministerial conference -- a gathering of the organization’s highest decision-making body -- takes place at the end of November, and the U.S. is working on a draft ministerial decision “aimed at strengthening resiliency and preparedness through trade facilitation,” Tai said.
The proposal “would improve the sharing of information, experiences, and lessons learned from Covid-19 responses to help border agencies respond in future crises,” she said.
Tai said she will consider the WTO conference, known as MC12, to be a success if members “feel a hope and invigoration for continuing the work we do at the WTO -- and if there are a couple of trophies and badges that we have from the work at MC12, all the better.”
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